For women between the ages of 25 to 55 years, establishing good credit is one of the more important aspects of life. A credit score can determine the things you buy, the type of cars you will drive and their insurance rates, where you work, and where you will live throughout your life. This is why it is supremely important to create and maintain the best credit possible. If you have no established credit, a poor credit history, or disputes that are unresolved, your purchasing power and your ability to get a loan or mortgage will be compromised. It is not at all uncommon for people to fall into debt at some point in their lifetime, and this usually leads to the situations that cause bad credit. There are several major areas to consider when establishing good credit.

In an ideal world, the best scenario is to keep your credit spotless from the beginning. The best credit score will be rated “A”, and this can be established if you have at least six solid credit sources that are at least two years old with no late payments. These sources should include auto loans, credit cards, and mortgages. Credit underwriters are aware that a person’s credit history won’t always be perfect, and a few minor mistakes are usually not counted largely against your score as long as you have the weight of revolving accounts with high limits that are not pushed to the limit. You should be very careful to make sure that no payments are ever over 60 days late, and mortgage or rent payments should never be late.

Bank Accounts

Having both a checking and savings account is part of your financial history that lenders will look for. Although most banks do not report checking and savings to your credit report, you will need a checking or a savings account in order to qualify for a mortgage loan or auto loan with most lenders. Even if you have to keep both balances low, having both accounts will improve your overall credit rating with underwriters. Most lenders will require a minimum of three months worth of statements and it’s not unusual for mortgage loan underwriters to ask for 12 full months of bank account statements to ascertain your overall spending habits. Additionally, having one or more credit cards is good for your credit rating. However, that does not mean you have to max them out. Using your credit to the limits will show that you have dangerous spending habits, and this can actually lower your credit score.

Stable AddressHaving a stable address is another important factor that will help in establishing good credit. When starting out on your own in life, it is easy to move around several times before finding a suitable living place. This can be seen as a red flag though if you have not maintained the same address for at least two straight years. It is all about credit risk from the eyes of the lender, and the appearance of stability will greatly improve your chances when seeking a loan. If you are attending college, you will be given a bit more latitude if you have changed several locations in the past few years.

Income

Your income is a very important within the matrix of establishing good credit, and it is an indication of how much you can borrow, or if you have enough debt-to-earning ratio, to pay back a loan on time. Those who underwrite loans can frown on people who have high incomes and a lot of debt. They are aware that your financial situation can change at any moment. Whether your income is high, low, or moderate, most lenders will look on you favorably if you have proven that you can pay back a loan and make payments on time by keeping a healthy debt to income ratio.

Present Employer

Lenders will also look closely at how long you have been with your present employer. It is usually felt that people will change jobs or careers at least once every seven years. It might be best not to run with the herd on this theory though. Sticking with a job is seen as a sign of stability, and it allows you upward mobility if you have put the time and energy into it. Often, when in the running for a new job, a prospective employee may judge your worthiness and background by how solid a credit rating you have. If you can handle your own affairs successfully, it is a good indication that you will be able to handle affairs of the company in the same responsible manner.

Your First Credit Card

If you have credit cards, you need to develop the habit of using them wisely. The goal should be to accumulate only those cards that you really have a true use for. There is no harm in starting out small either.

If you are opting for your first card, you can settle for a minimal spending balance, and then move to a higher spending limit as you get comfortable using it. If you are a seasoned credit card user, you may want to consider canceling the cards which are not essential, and keep only the card of cards that count. Retail credit cards are great for establishing good credit, and lenders are often more than willing to give the novice a break. Try and apply for a credit card that represents a major card brand name, and if you cannot get an unsecured card, then try and get one that is secured.

A secured card allows you to deposit a certain amount in a special account, and this is what you will be using as your credit limit. The amount is usually between $100 and $1000, and will depend on your banks policies. If you are issued a credit card, your deposit assures the bank that you will honor your credit card purchases. It is not a bad idea when applying to ask about rates or any applicable processing fees, and whether these fees can be refunded if the application is denied.

The best scenario for establishing good credit is to secure a low-interest credit card that also has a low annual fee. If you have more than one credit card, it is wise to transfer the balance to the card that has the lowest annual rate and save money on interest. There might be a little risk involved in this move, because the rate on the one credit card may increase unexpectedly, and this may place you at the rate you started with.

Oftentimes, the low rate card may increase to an average credit card rate after a short period of six months. Also, keep in mind that while the transferred money may be charged a lower interest rate, any new purchases may be financed at a higher standard interest rate. Always read the fine print before you switch companies.

Some credit card companies may impose a monthly fee in exchange for the low rate you are hoping to get. The best bet is to get a low rate interest card without having to pay a monthly fee. Other options might include credit card companies which offer zero interest rates with an annual fee attached. The catch here is that you’ll have to pay the balance in full each month. Remember, you are going to get a lot of credit offers! Take your time in making these decisions! If you have maintained a good credit rating, the best offers will eventually find you.

It may be a good idea to avoid to high a credit limit if possible. You can be penalized without ever knowing it if you are perceived as a person who likes to spend. Even a stable credit history might be frowned upon if the credit card balances are too high. Requesting creditors to lower an existing credit card limit can also enhance your reputation. If your credit report shows you are the cause behind an inquiry to lower your balance, this will be acceptable, and won’t be seen as a problem by a potential lender. However, too many credit inquiries can may be interpreted negatively in the files of a major credit bureau.

Repairing Your Credit

If your credit report has taken some dings due to medical bills, divorce, loss of a job or other unexpected financial calamity, you can still re-establish good credit. It will take a little time and a little work, but it can be done. First, get a copy of your credit report from all three major credit bureaus; you can get a copy from annualcreditreport.com for free once a year. The credit bureaus are competitors, and what appears on one report may not appear on the other two. Different lenders use different bureaus so it’s important to get your report from all three.

Once you get your credit report, get a pad and paper and make a note of each incorrect item including addresses. Then go over your credit accounts, and one by one, dispute the items which are inaccurate or any item you think may not be yours. The Fair Credit Reporting Act is very specific and says, in a nutshell, any item appearing on your personal credit report must be either verified or deleted. There’s no middle ground there. Collection accounts can be sold several times and one account may look like several on your report. If you know a collection account has been sold, and the old account is still appearing on your report, dispute the item and get it removed. Multiple reporting of the same derogatory account can drive your credit score down even further than it should be.

Dealing With Old Credit ItemsOld items should also be removed as well. An account should only be reported for seven years from the date of the last payment. “Re-aging” is a common way to keep negative items on your credit report. If you feel a derogatory account has been “re-aged” on your credit report, dispute the item and ask that the date of last payment be shown.

In many cases, this is enough to get the item deleted if it falls under the definition as an old item. This will help you in establishing good credit.

Collection Accounts

For your existing collection accounts, contact the agency directly and offer a settlement. Start out low at around ten cents on the dollar and bargain from there, it’s not unusual to settle for thirty to forty cents on the dollar. Once you reach a deal for payment, ask for removal of the item from your credit report in exchange for payment. Some agencies will do this, but others will not. Above all, get any arrangements in writing before you pay. Most collection agencies are commission driven so any payment on an account is usually taken. Try to negotiate. You have nothing to lose and a better credit score to gain.

Get A Co-Signer

There are two main ways for re-establishing credit once you’ve had a run of bad luck that has affected your credit. Either get a loan or credit card with a co-signer whose information will report on your credit report, or you can get an unsecured card with a catalog company. They may give you an unsecured line of credit from $5000 to $12,000. Although you can only use the credit card for purchases from their specific catalog, it will be reported on your credit bureau as an unsecured revolving line of credit that can help rebuild your score. Before getting one of these cards, be sure to read the fine print. Not all catalog cards report to the bureaus for free, and many charge high fees and rates for applying. Shop around, and get a good deal for yourself.

Your credit report is the only way many people will ever know you. Make sure that your credit report represents a true picture of who you really are by establishing good credit and keeping it that way.

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